Photo by: Duane Daws
Sugar producer Illovo Sugar increased its headline earnings a share by 4.3% to 194c during the year ended March 31, while operating profit remained flat at R1.89-billion, impacted by low-priced imported sugar and an unfavourable fair value adjustment, the company said on Monday.
Group revenue increased by 20% to R13.2-billion and sugar production was up 4.8% to 1.83-million tons for the year under review.
Electricity cogeneration, furfural and ethanol production also increased.
“The business delivered an acceptable financial and operational performance last year considering the difficult trading conditions in all of our markets,” Illovo MD Gavin Dalgleish commented.
He stated that while the company’s operating profit was impacted by low-price imported sugar during the year under review, the recent introduction of import tariffs in South Africa and government’s commitment to regulate imports in Tanazania were expected to curb the negative impacts of these imports in future.
“Sugar is a cyclical commodity and we are currently at the bottom end of the cycle. We expect this cycle to turn in the short to medium term and, thus, benefit from the huge growth in Africa, where Illovo is uniquely positioned,” Dalgleish said.
However, tough market conditions were expected for the foreseeable future.
Meanwhile, the Food and Allied Workers Union on Moday said that more than 5 000 workers in the sugar industry would embark on a wage strike on Tuesday demanding a wage increase of 11% and a higher housing allowance, among other demands.